With our slower market, sellers and builders are getting very creative when it comes to marketing. Last week our little corner of the world made the national news profiling Bremerton’s The 400 Condo development. On April 20th, twenty eight units will be up for auction. The Real Estate Disposition Corporation, a private auction firm will be conducting the auction. According to the Kitsap Sun, starting bids will be almost 60% off the list price. So, bidding for the smallest condos — one bedroom, one bathroom units with about 575 square feet — will start at $109,000, a drastic reduction from $259,000.
So, no surprise, these prices got the attention of the public. I called the sales office today and according to a representative at The 400, as of yesterday (3/30/08), over 1600 people have toured the condos since the first viewing weekend just two weeks ago (800 toured in the first weekend). What the media and the auction company fail to mention however, is the hidden reserve price built into each condo. The “bidding” may start at $109,000 for a $259,000 condo, but the hidden reserve price might be closer to $200,000. See the PDF under the Disclosure section on the auction REDC Website. Plus, the buyer must pay a 5% auction commission on top of the sales price.
I don’t blame the investors of The 400 for trying to sell their investment. But, misleading the buyers who are already wading through the media madness about the current real estate market is just not ok.